Weekly Market Reports


24 March 2016

Thursday, March 24, 2016

WEEKLY MARKET REPORT

Week Ending 25th March, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S39/15

This Week

M39/15

Last Sale

S38/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1515

1499

1506

+9

1337

+178

18

1458

1463

1450

+8

1301

+157

19

1405

1398

1382

+23

1205

+200

20

1365

1359

1331

+34

1172

+193

21

1348

1345

1328

+20

1159

+189

22

1333n

1332

1318n

+15

1134n

+199

26

976n

970n

977n

-1

930n

+46

28

811n

805

824n

-13

836

-25

30

695n

697n

699n

-4

787

-92

MC

1091

1096

1080

+11

933

+158

Another winner at The Royal Easter Show

For the second year running wool auctions were held in the sheep pavilion at the Royal Easter Show. Like last year wool buyers reacted positively donning their jackets and ties to push the market into positive territory. 

Macwool had a good catalogue of 1300 bales with a cross section of clips from the Western Division through to Coolah and Cassilis in the east. Our top price of 1188 cents was a re-offer making 120 cents more than two weeks prior. High VM is certainly a feature of our offering at present and competition on these lots was consistent throughout from mainly Chinese interests. There were a few soft spots in the high VM carbonising types however, generally, oddments are still trading at near record levels.

The best competition in the fleece section was seen in the 20 micron categories with many well measuring, high yielding lots making well over a 1000c/kg greasy. Crossbred wools continue to do well right across all categories with some of our clients averaging $1,000 a bale.

Macwool was well supported by clients yesterday with growers attending from Cobar, Gilgandra, Coolah and Molong. The RAS and AWEX have done a great job in setting up the impromptu sale room in the middle of the sheep pavilion with a clear Perspex partition giving visitors a good view of the auction in action with real time data on big screens and speakers broadcasting the events. The offering of approximately 6500 bales grossed a tick over $8.3 million at a healthy average of $1,356 per bale.

The Macwool sale team of Sharpy, Luke, Hunter and Don looked resplendent in their blue blazers and tartan ties. After a long day in the sale room (9:30am til 2:45pm) many buyers noted that our auctioneers picked up the pace and came home with a 'wet sail'. 

Wool sales go into recess next week for one week and we return on 5th April to another unique sale event being held at Circular Quay in front of the gathering of the International Wool Textile Organisation (IWTO). The annual IWTO Conference has only been held in Australia twice in the last thirty years, this will be the 88th conference.

Macwool will offer a catalogue of 1850 bales with many clients planning to attend the sale from as far afield as Wilcannia. We believe the positive trend in the market will continue, not withstanding another surge of the Aussie dollar which crept over 76 US cents during the week.

We wish all our clients and their families a Happy and a safe Easter.

 

Main Buyers (This Week)

 

1

Techwool

5714

2

Fox & Lillie

3346

3

Lempriere (Aust)

3204

4

PJ Morris

3034

5

Global Wool Exp.

2919

6

Chinatex

2770

7

Aust. Merino Exp.

2593

8

Tianyu Wool

2143

9

Modiano

1845

 

 

Eastern Market Indicators (AUD cents/kg clean)

1239 cents é 12 cent compared with 18/03/2016

Northern Market Indicators (AUD cents/kg clean)

1261 cents é 9 cents compared with 18/03/2016

AUD/USD Currency Exchange

0.7623 é 0.0026  compared with 18/03/2016

18 March 2016

Friday, March 18, 2016

WEEKLY MARKET REPORT

Week Ending 18th March, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S38/15

This Week

M38/15

Last Sale

S37/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1506

1486

1503n

+3

1336n

+170

18

1450

1448

1446

+4

1299

+151

19

1382

1382

1372

+10

1208

+174

20

1331

1340

1333

-2

1170

+161

21

1328

1324

1333

-5

1157

+171

22

1318n

1318

1315n

+3

1134

+184

26

977n

966n

971n

+6

918n

+59

28

824n

807

830

-6

831

-7

30

699n

695

703

-4

787

-88

MC

1080

1091

1077

+3

925

+155

 FINALLY, SOME GOOD NEWS!

 There was a turnaround in sentiment this week with the industry yardstick (the AWEX Eastern Market Indicator) closing four cents higher. It was its first gain after seven consecutive daily losses spanning more than three weeks. A catalogue similar to the past fortnight, totalling just below 39,000 bales, opened slowly on Wednesday. It was a staggered start between selling centres and the small Sydney sale initially opened weaker. Enthusiasm increased over the day however with Melbourne firming 5 cents and Fremantle lifting 10 cents late in the day.

It was a mirror image of that pattern on Thursday, however, with a strong start losing momentum over the day. The East coast still managed increases for the day but Fremantle lost ground. The irregularity came on the back of a sharp bounce in the Australian dollar which jumped 1.6 US cents the previous night. Although there were some losses over the two days, the net result still mostly favoured the positive side of the ledger. Prices closed 5 to 10 cents higher when compared with the previous sale with Melbourne receiving the biggest advantage.

A strong start pushed Merino skirtings slightly higher for the week. Crossbreds were mixed; cheaper in Sydney but dearer in Melbourne (despite a weak final day). Cardings also had varied results although the movements compared to the previous week were minimal. Just over 48,000 bales are expected next week, the largest sale since early January and the final sale before the annual one week Easter recess. Macdonald Woolbrokers sell next Wednesday at the Sydney Royal Easter Show with an offering of 1,320 bales.

Ag Concepts Fwd Prices at 18 March

Micron

Date

Low

High

19

13-Jul-16

1365

1365

19

21-Sep-16

1350

1350

 

Main Buyers (This Week)

 

1

Techwool

5820

2

Fox & Lillie

4350

3

Chinatex

3441

4

Global Wool Exp.

3124

5

Lempriere (Aust)

2447

6

Aust. Merino

2323

7

PJ Morris

1965

8

Kathaytex Aust.

1205

9

Michell Aust.

797

 

 

Eastern Market Indicators (AUD cents/kg clean)

1227 cents é 4 cent compared with 11/03/2016

Northern Market Indicators (AUD cents/kg clean)

1252 cents é 2 cents compared with 11/03/2016

AUD/USD Currency Exchange

0.7597 é 0.0114  compared with 11/03/2016

11 March 2016

Friday, March 11, 2016

WEEKLY MARKET REPORT

Week Ending 11th March, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S37/15

This Week

M37/15

Last Sale

S36/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1503n

1484

1547n

-44

1334

+169

18

1446

1437

1493

-47

1303

+143

19

1372

1371

1403

-31

1204

+168

20

1333

1328

1373

-40

1170

+163

21

1333

1321

1370

-37

1165

+168

22

1315n

1304

1356n

-41

1152n

+163

26

971n

961n

976n

-5

915

+56

28

830

804

836n

-6

831

-1

30

703

686

721n

-18

786

-83

MC

1077

1093

1098

-21

908

+169

 CURRENCY SMASHES MARKET!

Another tough week for the market as a higher exchange rate meant only one thing - a cheaper market. Despite an identical national catalogue to the previous sale (39,000 bales) the smaller offering was of no help - the market had its biggest weekly fall in 6 months. The benchmark AWEX EMI tumbled 35 cents to 1223, a level not seen since late October. In $US terms the market fell by a modest 3 cents, this due to the rising currency. The falls were consistent across all the micron categories, 30 to 45 cents. Buyers still favoured the better types with the “right specs” - these not losing the amounts (20 to 30 cents) the lower spec types did as these copped the brunt of the falls, up to 60 cents cheaper.

Skirtings kept pace with the falls in the fleece room as most types and descriptions gave up 40 to 50 cents. Some better lots in the 18 to 19 micron range <5% VM may have escaped the worst of the carnage, back by 20 cents. Crossbreds, which can suffer the most from shifts in the exchange rate, seemed to be the least affected sector as finer microns <28 only lost around 5 cents while the broader types >30 fell by 10 to 20 cents. Cardings didn’t escape the carnage either. All types and descriptions fell by 15 to 30 cents as all 3 regional MCIs are below 1100 cents.

Certainly the toughest sale for some time as the $A rush to 75 cents put paid to any idea that the market may settle (the $A now at its highest level since July 2015).  The rate of the $A rise to 75 cents looks to have caught everyone by surprise, a 4 cent lift in 3 weeks as the EMI has given up 62 cents over the same period. The strengthening of currencies across the globe can be attributed mainly to the rebound in commodity prices over the past month and better economic growth in the US coupled with strong employment data there, Australia’s strong GDP data, an interest rate cut in New Zealand and China’s better than expected growth predicted for this year. The continuing upward correction in the iron ore and oil prices could indicate that the worst is over for these 2 benchmark commodities - iron ore at $US60/tonne and oil now above $US41/barrel. This may well indicate global economic growth could be on the way up rather than stagnant, at best, but could see even more strengthening of currencies against the $US, something we don’t want.

The 3% fall is indeed disappointing but some confidence can be gained for the longer term market prospects. The resilience of the market in $US terms indicates that demand is relatively stable and the spot market is reacting to the severe swings in the foreign ex markets. Stocks of greasy wool in the pipeline are being reported as very low and the upcoming supply at auction is expected to be shy of what the market will require. If currency rates stabilise we should see renewed interest and a slowly improving price level. Next week’s sale will be the last at Yennora for 3 weeks as the sales before Easter will be at the Royal Easter Show and after Easter in conjunction with the IWTO Conference in Sydney.

 Main Buyers (This Week)

 

1

Chinatex

3984

2

Techwool

3590

3

Fox & Lillie

2982

4

Global Wool Exp.

2913

5

Aust. Merino

2564

6

Lempriere (Aust)

2115

7

Tianyu Wool

1945

8

PJ Morris

1388

9

Vic Wool Proc.

743

 

 

Eastern Market Indicators (AUD cents/kg clean)

1223 cents ê 35 cent compared with 4/03/2016

Northern Market Indicators (AUD cents/kg clean)

1250 cents ê 33 cents compared with 4/03/2016

AUD/USD Currency Exchange

0.7483 é 0.0181  compared with 4/03/2016

4 March 2016

Friday, March 04, 2016

WEEKLY MARKET REPORT

Week Ending 4th March, 2016

AWEX Northern Micron Indices Comparison

AWEX INDEX

This Week

S36/15

This Week

M36/15

Last Sale

S35/15

Sydney

Change

Last Year

Sydney

Sydney Yearly

Change

17

1547n

1530n

1575

-28

1330

+217

18

1493

1473

1508

-15

1290

+203

19

1403

1400

1421

-18

1194

+209

20

1373

1367

1378

-5

1159

+214

21

1370

1366

1378

-8

1158

+212

22

1356n

1354n

1365n

-9

1152n

+204

26

976n

969n

974n

+2

904n

+72

28

836n

823

830

+6

816

+20

30

721n

701

719

+2

778

-57

MC

1098

1122

1108

-10

909

+189

CURRENCY UP, MARKET DOWN

 Despite the smallest national catalogue in a month (39,850) the market couldn’t sustain last sale’s levels and drifted lower by 10 cents to 1258, the lowest point since early December. Wild currency movements from 71.10 last weekend to 73.75 overnight put paid to any positive movement for the market. Losses were felt more so at the fine and super-fine end, 17.5 and finer -25 to 30 cents, 18 to 19.5 back 10 to 20 and 20 micron and broader just 5 to 10 off. The very best types (finer than 19) seemed to hold their own coming off a designated super-fine sale. In a first for Macdonald &Co. we offered 9 bales of super-fine wool a/c Bundi P’ship (Rick Burns & Jill Williams) from Ullamalla, via Hill End, that qualified for the “Sustainawool” integrity scheme introduced by New England Wool. This scheme was introduced “To promote the production of the highest quality wool via the sustainable management of natural and physical resources”. The 2 fleece lines averaged 1302c/kg, 128 and 141 cents above their indicators. Italian spinners and weavers Mazzoto and Reda bought 1 fleece lot each both to be processed in Biella, northern Italy, for high end men’s and ladies’ fashions for Europe.

Skirtings suffered a similar fate to fleece types. Although remaining solid on the opening day when we sold, they lost 20 cents on Thursday. The “Sustainawool” BKN from Bundi P’ship made 985 cents, bought by New England Wool for Vitale Barberis to be also processed in Italy - a great effort by these growers to produce such a fine article. Cardings followed a similar track to skirtings, a firm opening only to see all types in this sector lose 10 to 15 cents on the 2nd day. Crossbreds seemed to fare the best of any sector finishing fully firm to 5 cents better despite an increase to 25% of the offering on the eastern Seaboard.

The one and only factor to effect this sale was the upward movements of the A$ that stymied prices but not to the degree that was being bandied around earlier in the week. Underscoring demand strength was, as a result of exchange rate shifts, the EMI in US$ terms that rose by 10 cents to 919 - a level not seen since last August (928). The better types ultimately bound for Europe, succumbed to the abrupt rising A$ against the Euro (a swing of 7% over the past few weeks).

One factor that did help the market not to fall as much as was anticipated was the variety of types on offer, which did help competition to a certain degree and the offering falling below 40,000 bales. Next week has 43,000 bales on offer with currency direction to play a critical role. On the flip-side is the hand to mouth operations that all mills work with as purchases are being placed on a’ just-in-time’ delivery order can cause immediate price reaction, more relevant to indent buyers who operate on a US$ or Euro delivered basis. Just a reminder to growers who want to sell at the Royal Easter Show, Wednesday, March 23rd that wool will need to be delivered by next Wednesday, 9th March.

Main Buyers (This Week)

 

1

Techwool

4641

2

Chinatex

3601

3

Global Wool Exp.

3181

4

Lempriere (Aust)

2907

5

Fox & Lillie

2647

6

Modiano

2087

7

Aust. Merino

2079

8

Tianyu Wool

1818

9

PJ Morris

1668

 

 

Eastern Market Indicators (AUD cents/kg clean)

1258 cents ê 10 cent compared with 26/02/2016

Northern Market Indicators (AUD cents/kg clean)

1283 cents ê 13 cents compared with 26/02/2016

AUD/USD Currency Exchange

0.7302 é 0.0127  compared with 26/02/2016